Every so often we will see a company declare a “special dividend” which is separate from the typical recurring dividend cycle, if there is one. It is frequently a reflection of exceptionally strong earnings and/or a company with a large cash balance. It is a positive sign regarding the financial health of this corporation. Some [...]
Ask Alan – Avoiding Early Exercise Prior To A Dividend Distribution
Alan answers a question posed by Ron, who asked: “I own PII, which I purchased for $90 and have a June 90 call in place. PII is trading above $90 at the moment, and goes X dividend on May 30th and I DO NOT want to be called away. I’ll be using the Elite version [...]
Setting Up A Technical Chart + An Example Of An Ideal Chart
Technical analysis is the method of predicting future stock price movements based on observation of historical stock price movements. It is an essential tool in the armamentarium of covered call writers, and critical in achieving maximum success. We use technical analysis in our stock selection process, buy/sell decisions, strike price selections and exit strategy determinations. [...]
Ask Alan – Buying Back Options When The Stock Price Gaps Up
Alan answers a question posed by William, who asked: “Do you buy back the option at the same strike you originally sold?. Here’s the example. I bought VRX at $77.55 and sold the June $77.50 call option for $2.45. The stock then skyrocketed to $91.80. My question is… Should I buy back the $77.50 option [...]
Examining A Covered Call Trade
Mastering covered call writing requires us to learn from our mistakes and not repeating them. We can then utilize a series of guidelines and rules that will guide us to the highest possible returns with the least amount of risk. Maximizing profits with capital preservation in mind is what the BCI methodology is all about. [...]
Ask Alan – How to Compute Final Covered Call Returns-Part 3
Alan answers a question posed collective my many of the BCI member family, who ask about calculating final returns after the trade has been completed. This is part 3 of a 3 part series. Watch part 1 here Watch part 2 here If you want more “Ask Alan” videos, you can view the archive. More [...]
Stock Option Expiration Cycles: Beware Of Expiration Dates
In the BCI methodology for covered call writing we use predominantly 1-month options. The reasons are as follows: Generate the highest annualized returns Allows us to avoid earnings reports, a key rule in the BCI methodology Keep our obligation to a short-term time frame allowing us to keep only the best current performers in our [...]
Ask Alan – How to Compute Final Covered Call Returns-Part 2
Alan answers a question posed collective my many of the BCI member family, who ask about calculating final returns after the trade has been completed. This is part 2 of a 3 part series. Watch part 1 here Watch part 3 here If you want more “Ask Alan” videos, you can view the archive. More [...]
Should I Roll My Option When The Stock Price Is DEEP In-The-Money?
Exit strategy execution is a critical skill every covered call writer should master. In addition to managing positions where share price has decreased there are also situations where we can benefit when price has dramatically accelerated. Let’s look at a trade recently executed by one of our Premium Members: Our member generated a nice 1-month [...]
Ask Alan – How to Compute Final Covered Call Returns-Part 1
Alan answers a question posed collective my many of the BCI member family, who ask about calculating final returns after the trade has been completed. This is part 1 of a 3 part series. Watch part 2 here Watch part 3 here If you want more “Ask Alan” videos, you can view the archive. More [...]
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Alan Ellman Gene, The sessions will be different. The morni
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Alan B Message: Ron says: I bought the stock at ninety
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